Where Food Comes From (WFCF) AI Stock Analysis

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Where Food Comes From

(NASDAQ:WFCF)

60Neutral

Where Food Comes From scores moderately due to strong financial health and cash flow management, which are offset by technical analysis indicating bearish trends. Valuation appears fair, though not particularly compelling, and the earnings call highlights challenges in revenue but also potential growth avenues. The declining equity ratio and lack of a dividend yield are additional concerns.

Where Food Comes From (WFCF) vs. S&P 500 (SPY)

Market Cap

$52.12M

Dividend YieldN/A

Average Volume (3M)2.04K

Price to Earnings (P/E)27.0

Beta (1Y)-0.09

Revenue Growth-0.05%

EPS Growth-6.02%

CountryUS

Employees93

SectorTechnology

Sector Strength80

IndustrySoftware - Application

Share Statistics

EPS (TTM)<0.01

Shares Outstanding5,212,387

10 Day Avg. Volume2,377

30 Day Avg. Volume2,038

Financial Highlights & Ratios

PEG Ratio2.49

Price to Book (P/B)5.92

Price to Sales (P/S)0.00

P/FCF Ratio22.49

Enterprise Value/Market Cap1.12

Enterprise Value/Revenue0.57

Enterprise Value/Gross Profit5.53

Enterprise Value/Ebitda4.38

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Where Food Comes From Business Overview & Revenue Model

Company DescriptionWhere Food Comes From, Inc. (WFCF) is a leading provider of certification and verification services in the agricultural sector, focusing on ensuring transparency and quality in food production. The company offers a range of services including third-party verification of food production practices, certification of organic and non-GMO products, and animal welfare assessments. WFCF aims to enhance consumer confidence by ensuring that food products meet specific standards and claims, thereby supporting sustainable and ethical food production practices.

How the Company Makes MoneyWhere Food Comes From, Inc. makes money primarily through service fees charged for its certification and verification services. The company operates by partnering with producers, processors, and retailers who seek to validate their products' claims regarding safety, quality, and sustainability. Revenue streams include fees for organic certification, non-GMO verification, and other specialized quality assurance programs. Additionally, WFCF may benefit from strategic partnerships with industry stakeholders, which can enhance its service offerings and expand its market reach. The company also generates income through educational services and consulting, helping clients to improve their standards and processes in alignment with consumer expectations and regulatory requirements.

Where Food Comes From Financial Statement Overview

Summary

Where Food Comes From has a solid financial standing with strong profitability metrics and stable balance sheet indicators. The company maintains healthy margins and effective cash flow management. However, a slight decline in EBIT and assets needs attention.

Income Statement

Very Positive

The income statement shows strong gross and net profit margins, with Gross Profit Margin at approximately 41% and Net Profit Margin around 8.2% for 2024. The revenue growth rate has been steady, with a slight increase of 2.4% from 2023 to 2024. EBIT Margin is solid at 8.6%, though a decline from the previous year, indicating effective cost management. Overall, the company is performing well with consistent profitability.

Balance Sheet

Positive

The balance sheet indicates a stable financial position with a moderate Debt-to-Equity Ratio of 0.26 in 2024, reflecting conservative leverage. The Equity Ratio stands at 64.9%, signifying strong equity financing. Return on Equity is robust at 21.3%, demonstrating efficient use of shareholder funds. The reduction in total assets and equity over the years could be a concern, but the overall stability is maintained.

Cash Flow

Positive

Cash flow analysis reveals positive trends with strong Free Cash Flow, although there is a slight decline in Free Cash Flow from 2023 to 2024. Operating Cash Flow to Net Income Ratio is favorable, indicating earnings are well-backed by cash flows. Free Cash Flow to Net Income Ratio is excellent at 1.21, suggesting effective cash management. However, fluctuating financing cash flows signal potential volatility in external financing activities.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
25.75M	25.14M	24.84M	21.93M	20.08M
	Gross Profit
10.56M	10.52M	10.47M	9.74M	8.93M
	EBIT
2.21M	2.70M	1.89M	1.51M	697.00K
	EBITDA
3.63M	3.33M	3.53M	3.10M	2.86M
	Net Income Common Stockholders
2.12M	2.15M	1.99M	2.96M	1.39M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.01M	2.64M	4.37M	5.41M	4.37M
	Total Assets
15.31M	16.29M	18.30M	19.78M	19.45M
	Total Debt
2.55M	2.80M	3.13M	3.37M	4.60M
	Net Debt
534.00K	159.00K	-1.24M	-2.05M	230.00K
	Total Liabilities
5.37M	5.47M	5.82M	6.04M	6.98M
	Stockholders Equity
9.93M	10.82M	12.48M	13.75M	12.46M
Cash Flow		Free Cash Flow
2.57M	2.67M	2.39M	2.81M	1.99M
	Operating Cash Flow
2.73M	2.82M	2.65M	3.02M	2.45M
	Investing Cash Flow
-159.00K	-648.00K	-267.00K	-3.00K	-730.00K
	Financing Cash Flow
-3.20M	-3.90M	-3.43M	-1.98M	14.00K

Where Food Comes From Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.80

Price Trends

50DMA

11.12

Negative

100DMA

11.76

Negative

200DMA

11.54

Negative

Market Momentum

MACD

-0.42

Positive

RSI

40.41

Neutral

STOCH

20.74

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WFCF, the sentiment is Negative. The current price of 9.8 is below the 20-day moving average (MA) of 10.83, below the 50-day MA of 11.12, and below the 200-day MA of 11.54, indicating a bearish trend. The MACD of -0.42 indicates Positive momentum. The RSI at 40.41 is Neutral, neither overbought nor oversold. The STOCH value of 20.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WFCF.

Where Food Comes From Risk Analysis

Where Food Comes From disclosed 21 risk factors in its most recent earnings report. Where Food Comes From reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Where Food Comes From Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TRAK	77 Outperform	$409.57M	69.01	14.17%	0.30%	9.73%	22.33%
INLX	63 Neutral	$51.77M	―	-10.79%	―	3.21%	-550.35%
Sector *	60 Neutral	$11.62B	10.48	-7.27%	2.93%	7.46%	-10.64%
WFCF	60 Neutral	$52.12M	26.99	20.59%	―	-0.05%	-6.02%
DUOT	55 Neutral	$94.05M	―	-189.13%	―	89.27%	26.30%
PSQH	53 Neutral	$90.62M	―	-223.65%	―	221.24%	13.36%

* Technology Sector Average

Performance Comparison

WFCF

Where Food Comes From

10.00

-2.00

-16.67%

TRAK

ReposiTrak

22.41

5.31

31.05%

DUOT

Duos Technologies Group

8.07

5.36

197.79%

INLX

Intellinetics

12.60

4.65

58.49%

PSQH

PSQ Holdings

2.00

-1.81

-47.51%

Where Food Comes From Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: -12.58%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with significant challenges in revenue and net income due to industry-specific issues. However, the company showed resilience through stable margins and growth in newer segments like the Upcycled Certified program and retail labeling, along with maintaining high customer retention rates.

Q1-2025 Updates

Positive Updates

Stable Gross Margins Amid Revenue Decline

Despite a nearly 6% revenue decline, gross margins remained stable at 41.6%, attributed to disciplined cost management.

Upcycled Certified Program Growth

The Upcycled Certified program continued to be the fastest-growing service, with total certifications growing 70% year-over-year in 2024 and 10% in the first quarter of 2025.

Expansion of Retail Labeling Program

The company announced the addition of two prominent retailers to its fee-based retail labeling program, with an initial launch in approximately 20 stores and potential expansion to hundreds more.

High Customer Retention Rates

Customer retention rates remained strong, always in the high 90% range, despite industry challenges.

Negative Updates

Revenue Decline Due to Verification and Certification Services

Total revenue declined by approximately 6% year-over-year, primarily due to a $252,000 decrease in the verification and certification services segment.

Decrease in Net Income

Net income for the quarter was $31,000, down from $178,000 in the same quarter last year, partly due to a $76,000 non-cash charge on digital assets.

Disruptions in Poultry and Dairy Cow Verification

The company experienced disruptions in its poultry and dairy cow verification businesses due to avian influenza outbreaks.

Company Guidance

During the first quarter of 2025, Where Food Comes From reported a 6% year-over-year decline in total revenue, primarily due to a $252,000 drop in the verification and certification services segment. This decline was attributed to fewer cattle moving through the system, influenced by cyclical herd size reduction and severe droughts. Despite these challenges, gross margins remained relatively stable at 41.6%, thanks to disciplined cost management, with SG&A expenses flat at $2.1 million. Net income was recorded at $31,000, or $0.01 per diluted share, down from $178,000 or $0.03 per share the previous year, impacted by a $76,000 non-cash charge on digital assets. The company continues to grow its Upcycled Certified program, which saw a 10% increase in certifications in the first quarter, and has expanded its retail labeling program to two additional prominent retailers, enhancing brand visibility and potential revenue streams.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.